Healthcare property deals are on track to reach their highest level in 25 years, as assets including care homes and mental health care facilities are put up for sale. The UK healthcare property market is set to see record quarterly transaction levels for both M&A and fixed income in Q4 2020 with investment volumes in 2020 YTD already 25% higher than last year, according to Knight Frank.

Total investment volumes into UK healthcare property in 2019 totalled £1.76bn, whilst investment volumes in the sector so far in 2020 total almost £2.24bn. With Q4 set to see the completion of a number of prominent and high value deals, Knight Frank predicts that the final quarter of 2020 will witness the highest ever quarterly transaction levels in the UK healthcare real estate sector.

High-profile healthcare property deals that are on the market and in the pipeline include England’s largest mental healthcare provider The Priory Group (£1.5bn), mental health services provider Elysium Healthcare (£900m), children’s care and education services provider Keys Group (£250m) in addition to another £3bn of specialist (mental health, learning disability) providers and £1bn of broader healthcare property transactions.

This comes as healthcare property has seen surging interest from investors both in the traditional sectors such as care homes and private hospitals, in addition to rising demand for more specialist assets and providers such as mental health, learning disability and children’s services including children’s homes, foster care and schools.

Julian Evans, head of healthcare at Knight Frank, said: “With a number of high-profile and large portfolios in the healthcare property market being brought to market, we are predicting record sales taking place in Q4 2020. There are currently two distinct investment silos: institutional capital is chasing social care fixed income such as real estate and private equity and infrastructure funds are seeking specialist sector companies.